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WTI Oil Rises to Five-Week High on Consumer Sentiment; Brent Up

April 11 (Bloomberg) -- West Texas Intermediate crude climbed to a five-week high as U.S. consumer confidence rose in April and gasoline demand strengthened. Brent’s premium to WTI shrank to the narrowest since September.

WTI headed for the year’s biggest weekly gain. The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to 82.6, the highest level since July. Gasoline demand averaged over four weeks jumped to the most in three months April 4, the Energy Information Administration said. The Brent- WTI gap contracted as Libya was poised to boost oil shipments.

“As the economy grows, oil demand will grow,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “One of the most supportive things you can say about crude is the strong gasoline demand.”

WTI for May delivery rose 69 cents, or 0.7 percent, to $104.09 a barrel at 11:01 a.m. on the New York Mercantile Exchange after climbing to $104.20, the highest intraday level since March 4. The volume of all futures traded was 27 percent above the 100-day average. Prices have advanced 2.9 percent this week.

Brent for May settlement increased 28 cents, or 0.3 percent, to $107.74 a barrel on the London-based ICE Futures Europe exchange. Brent has gained 1 percent this week. Volume was 1.8 percent below the 100-day average. The European benchmark crude was at a $3.65 premium to WTI. The spread was at $4.06 based on closing prices yesterday, the narrowest since Sept. 19.

Economic Outlook

The median estimate in a Bloomberg survey of economists called for the consumer confidence level to increase to 81. The Michigan survey’s index of expectations six months from now increased to 73.3, the highest since August, from 70 last month.

“The economy is getting better,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The overall trend for crude is up.”

U.S. gasoline demand averaged 8.81 million barrels a day in the four weeks to April 4, the highest level since Jan. 3, the EIA said April 9. Inventories of the fuel dropped to 210.4 million barrels, the least since Nov. 15.

Gasoline for May delivery rose 2.11 cents, or 0.7 percent, to $3.029 a gallon on the Nymex. Volume was more than double the 100-day average. Prices have climbed 3.3 percent this week.

IEA Forecast

Crude also advanced as the International Energy Agency said the Organization of Petroleum Exporting Countries will need to pump more oil to meet global demand after supplies dropped below the collective 30 million-barrels-a-day target in March, the Paris-based IEA said in a monthly report.

“The IEA report should be bullish on oil,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “Libya is shipping more oil and it’s going to weigh on Brent.”

Libya’s state-run National Oil Corp. lifted force majeure on the Harigsa terminal yesterday, a statement on its website showed. Vienna-based oil company OMV AG provisionally booked a tanker to load as much as a million barrels of oil from the port next week, according to two traders with knowledge of the matter.

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